We’ve made a significant update to the Pi42 platform’s maintenance margin calculation process. This change is designed to improve margin accuracy and enhance your trading experience. Here’s everything you need to know.
What’s Changing?
Maintenance Margin Formula
The maintenance margin is the amount you need to keep your position open. You can now calculate it using the following formula:
Maintenance Margin = (Base Margin * Maintenance Margin Percentage) / 100
Base Margin Calculation
The base margin is the minimum required margin to open a position. We’ve updated this calculation to ensure greater accuracy:
Base Margin = (Position Size / Leverage) * (1 + Buffer)
Per Asset Margin
We calculate the margin for each asset by dividing the total maintenance margin by the quantity, then adjusting it based on position type.
- LONG Positions: Multiplier factor is
1 - SHORT Positions: Multiplier factor is
-1
Clarifying Margins
- Base Margin is used in the new calculations
- Locked Margin is used in other margin-related functions
These are distinct and serve different purposes in margin management.
Liquidation Price Calculation on Pi42
Liquidation occurs when a position’s margin falls below the required levels. Here’s how Pi42 calculates the liquidation price:
1️⃣ Bankruptcy Price
Bankruptcy Price = Entry Price – (Margin Amount / 1.01 / Position Quantity)
2️⃣ Maintenance Margin Price
Maintenance Margin Price = (Maintenance Margin * Multiplier Factor) / Quantity
3️⃣ Final Liquidation Price
Liquidation Price = Maintenance Margin Price + Bankruptcy Price
Remaining Position Margin
A position is taken into consideration for liquidation when
Remaining Position Margin ≤ Maintenance Margin
And the remaining position margin is calculated as
Remaining Position Margin = Initial Margin – Unrealized Losses
How the Liquidation Process Works
When your position reaches the liquidation price:
- Pi42 places a market order to close your position
- This happens when you can’t meet the margin requirement due to losses
During liquidation, Pi42 applies:
- Standard taker fee (as per the contract)
- Insurance clearance fee of 0.50% (for all contracts)
Liquidation Risk Management Tips
To help avoid liquidation on Pi42, you can:
- Monitor your positions regularly, especially in volatile markets
- Add more margin to positions nearing liquidation
- Enable Auto Margin Top-up to automatically add funds from your available balance
- Choose leverage levels wisely based on your risk appetite
- Set stop-loss orders above your liquidation threshold
Impact on Liquidation Price
This update directly impacts the timing and value at which liquidation occurs.
Key Takeaway:
- Liquidation occurs when:
Remaining Position Margin ≤ Maintenance Margin - With the new formula, maintenance margin is now more accurate, which may lead to slightly higher or lower liquidation prices, depending on market conditions and position type.
Have questions?
Please feel free to contact our support team for assistance and clarification at any time.
We’re here to ensure you have a smooth and informed trading experience.